I don’t think there are really any signs they are improving just yet. It will take time - the business is in pretty difficult position.

Opal Capital portfolio manager Omkar Joshi

Stadnik said Australian wealth managers’ valuations had fallen during 2021, and this had continued in 2022, due to the trend towards rising outflows and a lack of growth options.

“They aren’t expensive vs global peers, but we see few positive catalysts,” Stadnik said in a note.

Stadnik said that the sector’s outflows had hit a peak of -9.5 per cent in the March quarter, before moderating slightly to -7 per cent in the latest June quarter.

“Investment performance has been improving across the group and there is less passive pressure in Australia than in the US, but growth options are limited across the group, and we think a broad recovery to inflows is unlikely,” Stadnik said.

Opal Capital portfolio manager Omkar Joshi said he did not think there were signs of a turnaround in Magellan’s fortunes yet, and this would ultimately depend on the company’s global fund making market-beating returns.

“I don’t think there are really any signs they are improving just yet. It will take time - the business is in pretty difficult position,” Joshi said. “They are still in outflow, and performance is not great.”

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